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Business Horizons
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Measuring platform return on participation

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Abstract

While industry platforms can transform industries and drive the digital economy, little guidance exists to help managers decide which industry platform to join. Derived from industry research, we propose a six-step return-on-participation (ROP) method that enables managers to clearly and logically review how their firms are affected by a platform, what the benefits are, how current and future variable and fixed costs vary, as well as the often-hidden joining costs. We suggest this technique could also be used by managers to compare competing platforms and by platform owners to evaluate the attractiveness of their offerings.

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Business Horizons

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